The administration's decision this week to place a 30 percent tariff on imports of solar panels has drawn a predictable backlash from a range of critics, including the companies that install solar panels and the disciples of corporate free trade. Among the latter are a number of congressional Republicans and right-wing think tanks, which have suddenly risen to the defense of the solar installers. The Heritage Foundation, as an article in today's Washington Post points out, has opposed tax credits for solar installation, but has now aligned itself with the installers. As Heritage and the GOP legislators see it, whatever the market does must be right, even though there is nothing market-oriented about the Chinese government’s massive subsidies to its solar manufacturers, which has enabled China to dump huge numbers of solar panels on the U.S. market, thereby driving many American manufacturers out of business.
The belief that laissez-faire economics is invariably good for you also flies in the face of the reality that every nation provides financial assistance to its industries, through their provision of infrastructure, trained workers, purchasing, and direct subsidies. As Lou Uchitelle demonstrated in his book Manufacturing Matters, which I reviewed in the current issue of the Prospect, America’s federal, state, and local governments regularly provide about 20 percent of the funding for U.S. manufacturers. The contest that hundreds of cities have engaged in to woo Amazon with tax breaks and subsidies, curiously, hasn’t drawn much conservative ire. According to conservative doctrine, it’s OK for cities to woo businesses with financial rewards, but not okay for the federal government to do that. If the feds do it, that’s industrial policy. Horrors!
The United States was once the world leader in manufacturing solar panels, a position it relinquished almost entirely due to China's aggressive mercantilism. American finance and their defenders in the media have responded to such developments with aggressive indifference, or worse, which is a major reason why much of American industry has been hollowed out. At some point, the hedge funds and private equity firms that increasingly own American newspapers may realize that editorials decrying government intervention to assist U.S. manufacturing could be written more cheaply by editorial writers in Beijing, or better yet, just reprinted from China's People's Daily. If they can make more money eviscerating American manufacturing, why not make more money eviscerating American journalism?